view of interest in the economic prospects in Iraq, this website will provide
regular general updates to appraise visitors of the important administrative and
economic developments that might effect the international business environment.
1. General situation
the downfall of the previous Iraqi regime nearly three and a half months ago,
the crucial security situation in Iraq remains unsettled with consequently fairly
slow progress being achieved in other areas. Difficulties are still being experience
in repairing major aspects of life such as electricity supply, water treatment
and purification as well as the economically important oil production.
for legislative progress it is important to note that in accordance with generally
accepted rules of international law, local Iraqi laws previously issued will remain
in force and applicable until repealed or amended by a new authority or government.
Coalition Provisional Authority (CPA)
appointed the Iraqi Provisional Governing Council (GC) of 25 members which held
its first meeting on 13.07.03 The GC is expected to form a larger committee of
experts to prepare a draft Constitution which is expected to be subject of a national
referendum. Another important task of the GC will be to appoint ministers to administer
the day to day affairs of the Government. However, it should be noted that the
CPA’s Civil Administrator will have the authority to review the decisions of the
steps were made towards normalizing the economic and financial situation with
the appointment of a Provisional Governor of the Iraqi Central Bank (ICB) and
the declaration that the new currency will be in circulation on 15.10.03. This
will be an important step to reintegrate the Iraqi economy particularly since
there are presently two currencies in circulation with two varying exchange rates
in the autonomous Northern provinces and the rest of the country.
Governor of the ICB also declared that the ICB will coordinate with competent
parties to encourage international investments without being restricted to nationals
of Arab countries as was previously provided. The Governor further stated that
the liberalization of the economy, encouragement of local and international investments
and activating the banking sector will be a priority. Certain laws including the
ICB law, presently providing for very strict monetary and foreign exchange controls,
the commercial code, company law and other laws should be amended or new more
flexible liberal laws issued.
United Nations decided in Resolution 1483 adopted on 22.05.03, to remove all prohibitions
related to trade with Iraq and the provision of financial or economic resources
imposed by UN Resolutions.
addition to above mentioned UN Sanctions, local laws requiring import licenses,
the imposition of customs tariffs and providing strict exchange controls were
restrictive of trade to and with Iraq. While some of these controls have been
formally suspended as will be mentioned below others are simply not being enforced
presently and will need to be reviewed in due course.
CPA declared the suspension of customs duties and tariffs that were previously
imposed generally as a percentage of the cost of the goods or products imported
until the end of 2003. Consequently, a large number of consumer goods were brought
to Iraq to benefit from neighboring countries, particularly those with free zones.
By the end of the year a new customs law with new tariffs is expected to be issued.
Iraqi Income Tax No. (113) of 1982 as amended and the Regulations issued in accordance
therewith provide for the impositions of high tariffs as income tax. Although
a formal suspension of the imposition of income tax does not seem to have been
issued, the taxation authority does not seem to have reorganized consequently
there seems to be a de facto moratorium on the filing of tax returns and the collection
of taxes which has to be reviewed and organized in the near future.
above is not a legal opinion or advice. Contact
Gulf Law for further any detailed advice required on specific aspects
of developments in Iraq.
Update: December 2010
Update: December 2008
Update: August 2004
Update: October 2003
Update: Agency Law
Update: July 2003
Update on Agency Law: March 2001Iraq Law latest update from